22ndad: it is monday, the of february. i'm rishaad salamat and this is "trending business." we've been popping over to singapore and turkey. here is what we are watching. economists calling china's borrowing binge the worst in years. goldman sachs already saying this could trigger a new financial crisis. food prices up slightly after nigeria said it will back an outward freeze.

salvog firing the latest in the smartphone wars, unveiling its galaxy s7. virtua reality is the new growth partner. follow me on twitter. don't forget to include the hashtag as well. stocks having a little bit of a bounce. rally the biggest weekly in four years. japan reversing declines. a lot going on. -- here'snne yvonne. the nikkei off session highs. there could be boosted sentiment in equities. overall, we are seeing, we are still down 5% this year despite the best week we've had since

2011. we have paired back from the losses, but we are closer to being flat on the regional benchmark. the big news, the head of the securities regulator in china, has been removed from his role. the government really taking action here after last month's stock market rout, which did lead to that suspension of the circuit breaker system. analysts say someone had to bear the responsibility. we will see how that reaction is. bankormer chairman of as will now replace him. hsbc earnings are out later on today. losses of 0.1%. asx 200 up about 0.5%. we talk about singapore, pretty much flat. malaysia down 0.2%. taiwan pretty much flat. japan, we are seeing that

foreign investors are fleeing japan for six straight weeks. black rock is among the asset managers, one of the biggest ones, that are overweight on japan. they think the boj adopting negative rates is going to be the main thing that pushes things back up. that and the stimulus measures will keep a lid on the yen. i want to end on the yen. we see a little bit of weakness today. year-to-date, the last month or so, it has climbed 0.6%. last week, third straight weekly advance. we are seeing honda and mazda saying that these currency losses are magnifying the situation in terms of earnings. debtad: china's ratio of to the size of economy is expected to climb. work to prevent a deeper slowdown.

shery ahn is all over this. what is going on? shery: the ever-present specter of china's debt overhang is expected to keep getting worse. seven out of 12 economist see the debt to gdp ratio increasing through 2019. at 283%ect debt to peek of gdp. policymakers are facing the delicate balancing act between keeping credit flowing to ensure average economic growth of around 6.5%, but not too fast to trigger a credit blowout. last week, a report showed that banks extended a record $385 billion of new loans in january. according to nomura holdings, about 40% of those loans go to state owned enterprises, which only contribute around 10% of china's economic output. their debt has jumped to 62%

from 55% since 2007. private companies seem to be doing a better job managing their debt. they have cut the ratio. goldman sachs says it is impossible to identify a specific debt to gdp level that will tip the chinese economy into financial crisis. but china's increase of debt is among the highest in recent history and every major country with rapid rising debt has experienced either financial crisis or prolonged economic slowdown. of course, we will have more on that story. we value your thoughts. use my hashtag. shares just started off their session in singapore. the country's biggest lender beating estimates. let's get over to southeast asia

correspondent, has haslinda amin. haslinda: thumbs up. rising this morning on the back of better than expected numbers. that is up 20% from a year ago. fromd a one-time gain selling its property investment. that contributed almost $100 million. finances remain healthy. the slowdown in china notwithstanding, the ceo says the fourth quarter cap's a strong year while unsettled financial markets have created uncertainty. the fundamentals are sound. the risks are manageable. looking ahead, the concern may be bad loans. forced, rivals have been to set aside more to cushion rising nonperforming loans. uob, nonperforming loans

rose 20%. singapore banks remain vulnerable. the exposure from at home and abroad. the credit quality right now is ok. , but low and under 1% something to keep an eye on. rishaad: thanks a lot for that, as. let's have a look at some of the other top stories we are watching for you today. zeb: there's a new man in the top job at china's national securities regulator. the latest fallout from the $5 trillion stock rout. the man who oversaw the response to that was removed from his post on saturday. this amid a haphazard response to halt the state market tumble last summer that reverberated throughout financial markets globally. officials were heavily criticized for heightening

turmoil in the market rather than ensuring stability. the new chairman is a former chairman of agricultural bank of china. sources say yahoo! is set to begin approaching potential corporate and private equity buyers today. those assets are expected to attract considerable interest from verizon, comcast, and at&t. are said to be interested according to people familiar with the situation. yahoo! revealed last friday that it is exploring strategic options as it works to challenge -- to transform its challenged business. shares are down 10% this year and its value dipped friday to $28 billion. sharp's board may meet on thursday to consider rescue plans. this according to a press report which says directors met over the weekend to discuss their options.

sharp is saddled with debts and its losses have deepened. a restructuring plan would spin off businesses. incj believes that its bid is the best for the company, but will respect sharp's final decision when it comes. >> i believe our plan would be the best for sharp's shareholders, employees, and customers, as well as all of japan. the other plan is also well considered. the two plans are compared based on money. but these are totally different concepts. we believe sharp's management will consider them properly and i will be happy with whatever decision they make as long as it works best for sure. zeb: another story we are following is how china is working with north korea's efforts to funnel cash. check it out at bloomberg.com. rishaad: it is a compelling

story. later in the program, talking to the chief executive of one of australia's biggest steel producers, a warning about iron ore and china. next, find out where malaysia's social security fund is putting its money. "trending business" act in two. ♪

rishaad: having a look at malaysia's economy. it lost more momentum in the fourth quarter. it did grow faster than market expectations. domestic demand offset slumping prices. let's get to tokyo and join stephen engle. let's talk about the prospects for malaysia this year. good morning to you, rish. we are at the apex summit in tokyo and our next guest is dr.

mohammed osman, ceo of the malaysian social security association. thanks so much for your time. let's get right to it. globally, markets have been in turmoil. we have central banks going in divergent areas. here in japan, negative rates. as the head of the social security organization in malaysia, how do you assign your investment strategy in this time of incredible risk? >> thank you. a sickly, if you look at the social security organization, we given by thernance government that we have the mandate which we can invest in and certainfolio strategy and with certain allocation. that is very diverse.

basically, when we look into investment, we always think of to have the fixe return,l with good fixed return, small return. i would say that it is very conservative. that is the approach when we look into the investment from the social security organization stephen: currently. stephen: you have about a $7 billion fund. are you looking abroad as well? ofcurrently, more than 90% our total investment is locally, but we have started to move slowly to international investment using our fund manager that we've already appointed. to move slowly into international investment with certain criteria and also with

certain requirement of return with this fund manager. you are not investing into rising stock markets or falling stock markets that are going to be necessarily risky. what is the sustainability criteria for you at a time in malaysia as well when the government is talking about increasing the minimum wage, increasing the ceiling for social security contributions, which to the layman and the worker says, my costs are going to go up. i'm going to have a higher contribution to social security every month. how important is it to you to provide that sustainability, that their money is going to be worthwhile? intofinitely, if we look -- when you have minimum wage, the contribution would be based on minimum wage. number two, looking at the raising of contribution, we used

to just go on about 3000, but now we increased to 4000. those who earn more than 4000 need to contribute based on 4000, which is about 1000 u.s. dollars. in conclusion, it is good for the organization because you are getting more contribution. but you need to understand that when you have that kind of ceiling, the exposure is more. this is where we have to balance out. when we talk about sustainability, it is not just the return you get from the contribution, but how you want to mitigate the exposure that you have. you are going to have riches bigger because workers, if they are injured, they will get benefits on higher contributions. looking at another aspect of sustainability, this is where we try to mitigate the accident.

most organizations fail to see that sustainability is just not about investment return, but how you can reduce accidents, how can you reduce those workers who just received benefits to stay out of the system? we need to get these disabled workers to go back to work. we are also promoting programs through disability management. stephen: you are having a global disability summit. we will be there. we have to wrap it up. i'm so sorry for the short time. security,ion, social stable returns as well. back to you. rishaad: thanks, steve. we will be back with him through the course of "trending business ." suicide bombings in syria have killed at least 140 people as the u.s. said russia had agreed to the terms of a limited cease-fire. islamic state claimed

responsibility for the attacks in damascus. u.s. secretary of state john kerry said he discussed the proposal with sergey lavrov but didn't give further details. scaling back the violence has become even more urgent as concern mounts that saudi arabia will become more heavily engaged in the war. or than half of the water supply to india's capital has been disrupted. protesters shut off a canal harrying waterton new delhi's 18 million people. reportedly eased their blockade of roads into the city, but schools remained closed on monday to conserve water. on sunday, fiji residents were told to stay inside after the strongest storms ever recorded in the southern hemisphere. at least six people were dead. 255 kilometers

per hour in the storm. a curfew has been a standard to monday morning. powered by over 2400 journalists in 150 bureaus around the world, this is bloomberg news. i'm rosalind chin. rishaad: coming up, samsung putting its hopes on a new smart phone. can it take a bite out of apple's market share is to mark -- market share? ♪

rishaad: huawei has backed apple's chief executive over breaking into an iphone. [indiscernible] move sets a the dangerous precedent for consumer privacy and while way agrees. thing fort important

the consumer, we should really protect the consumers, their privacy and security. this is key. that.port personally, i support apple's tim cook, his idea. rishaad: google has also cited with apple in its fight against the court order. the company's senior vice president for android says the issue needs more debate. >> obviously, we focus on building really secure products. but if requested or demanded by law agencies, of course, based on proper legal process, we will make information available to them. i think what we're talking about here is a completely different scenario. in this case, apple is being asked, it sounds like, to help in hacking their product. i think that is a very different

scenario from the way things work today. i think that requires a lot of discussion and debate. i have a lot of respect for law enforcement, of course, and don't have any respect for criminals. i think it is more about just a completely new way of thinking about things. emily: you have opponents out there, including president obama, who say this would be restricted to one criminal and if it is going to save lives, isn't that more important? why would you protect criminals? why would you put innocent people's lives at risk? >> it is a new area and i think it warrants more discussion. how is this going to work? what kind of precedent is being set? i think more thoughtful debate is warranted here. emily: if that phone was an android phone, what would you tell the fbi? >> hard to get into

hypotheticals. that is not the case we are talking about now. i think sundar's statement stands. we would feel the exact same way. this is a different scenario, so let's think this through a little bit more. emily: edward snowden has said this will meet the most important tech case in a decade. these are complex and important issues that you have the power to control as the head of android. >> it is about privacy. i think everyone agrees it is important. it is easy to talk about these cases in general terms, but the specifics do matter. i'm not familiar with the specifics of the san bernardino-apple situation. it is hard for me to comment on that. it does feel like an important area that requires more discussion. rishaad: android is used on samsung phones and that company has unveiled its latest

smartphone. has upgraded components and sees the return of a popular future. juliette has the latest. juliette: on the outside, it looks like the s8 that failed to excite samsung customers last year. inside is where samsung is hoping there is going to be a difference. it is bringing back the wrap around battery which gives it longer life and the memory card that had been removed as it tried to make a thinner model to tap into that iphone market. that really backfired. those who actually liked the qualities of the samsung were a little bit upset that they were trying to move too much like the iphone. it has also got a peripheral device. they are moving into that ai or virtual reality space. they are waterproof for almost 30 minutes in 1.5-meter deep water. there is a 5.1 inch screen and a

5.5 inch screen for the edge. we've been hearing from the vice president of samsung's operations and he says there are challenges ahead, but they are quite confident. rishaad: what are samsung investors looking for here? juliette: let's hear from the vice president who has been talking about what we are going to hear from. you can hear that sound bite. >> the market for the smartphone is obviously slowing down a little bit. still growing, but there is much more than just the phone now that you are holding in your hand. when you are using one of these new devices, this is more than a phone. this is your camera, your mp3 player, your tv, your recorder, everything and more and more and more is coming. that is going to be

crucial here. juliette: they want a hit product. they are calling this the hero product, coming from the zero, which was the s6 last year. rishaad: we're going to take a break. see you on the other side of it. ♪

rishaad: after the biggest weekly rally in four years, asian-pacific shares starting the week with tentative gains. again sparking a revival in japanese equities. than expected earnings pushing australia's benchmark into positive terrain. the pound falling the most in a month against the dollar after london's mayor says he will britain'sor exit from the eu. that put him at odds with david cameron.

johnson said he came to the decision after a great deal of hard thinking. singapore's bank beat estimates, rising 20% to a five-year high. dbs is the second major lender to restart better-than-expected earnings. they are unable an economic downturn in that part of the world. let's have a look at the open in hong kong. what is happening over in shanghai? yvonne is looking at it all. yvonne: a much better start off on the monday morning then the last hour or so. shanghai starting off strong, up 1%. over the weekend, we heard the csrc had has been removed and now replaced. the hang seng looking pretty good too, up 0.6%. pretty much flat in manila. we are entering earnings week in hong kong. say kong stock strategist

there's more upside than downside. expectations, they stay very low at the moment. earningssaw sales and miss estimates for the first time in six years. 2015, they say, could be looking better. reported 57 that have so far, sales and earnings are ahead of expectations. we continue to talk about the yuan. the bears, the forecasters that predicted this august rout win before then, they say china isn't the only thing they are worried about. talking about the u.s. entering recession and u.s. treasuries heading to all-time lows. we are seeing more sentiment today, better sentiment and optimism, with asx 200 at session highs. the nikkei extending those gains, up 1.2% on this monday.

let's see how things break up in the asia-pacific. we were seeing every sector in the red. oil and gas still a big headliner as we see u.s. crude below the $30 mark. we are seeing brent holding those declines at $33. in terms of oil and gas, falling shares. we continue to see that nigeria is now backing a proposal between saudi arabia and russia to freeze output. we are seeing today among the oil producers kind of mixed pictures. australian miners down 1.5%. back and forth. china, taking a look at the banks, the pboc is going to be adjusting reserve requirements for banks after review. we are seeing that shares are

rising. icbc rising as much as 3%. rishaad: let's have a look at china's private companies. they may be doing a better job than state owned ones. it is really about them cutting their debt. new research showing that leverage ratios improved in the private sector. let's get to our corporate finance reporter with more on this. >> we've heard a lot about corporate average rising in china. according to this latest research, from chinese university of hong kong, he collected official data from 300,000 firms in china and found out that private-sector firms are cutting leverage, whereas others are jacking up -- rishaad: and they are not heating what the president has been saying. he's been pledging they are going to cut corporate debt. >> that is a very good point. they are caught in a difficult

position. the stimulus package exacerbated leverage. some of them didn't want that debt, but they had to take the debt to invest. slowing, theyomy are burdened. banks still keep loaning to them. rishaad: a moral hazard as well. what about the government? what can they do about this? you alluded to it. you can point the finger at them. >> according to the professor, the number one thing is to cut that guarantee and let companies die. also, there's excess capacity that is being cut so the economy would function more efficiently. .o.e. is progressing slowly because china is struggling with a slowing economy and the rating agency expects to downgrade more

firms. rishaad: thank you very much. short the japanese yen and buy japanese stocks. some maintain that trade will still make you money. david is having a closer look at this. david: we are talking about goldman sachs, black rock, nomura. they are telling their clients this trade that has worked wonders for a lot of fund managers since abenomics kicked off may be taking a break, but is set to continue. it depends where dollar-yen will go. this is a broader view. i've flipped it so you can see this difference between where the topix goes and where the value of the japanese yen. let me flip this back. let's have a look at dollar-yen forecasts from goldman sachs. nomura also shares this call.

we could see downward pressure on dollar-yen. 110.99 asck to maybe some are calling for. what goldman is saying is that we are headed back to 130 by the end of this year. that is also the call of numeral. what they are saying is, have a look at outflows out of japan. it is normal to see money flow out of a market, but when you japan, thesee of levels are unprecedented. if you want to have a look at how much these outflows have one --his year, this that gives you a quick snapshot of the inflows and outflows. $23 billion, $24 billion. net portfolio outflows, just in equities. that is the underlying thinking. how this has translated when you take a look at where equities go

from here, we've put together some forecasts here. there's also a story on top japan on bloomberg which gives all this together. .i. strategies. n i put it together. that is the topix index over the last several years. we took the average. that is where we go, all the way to 1600. 1600 is basically 22% of where we are at the moment. black rock is saying we are overweight japanese equities. the stimulus measures will continue to keep the value of the yen low. japan is saying that so long as higher,en is at 110 or it won't be impacting or affecting corporate japan significantly, leading to higher share prices.

a lot of things to consider. lots of moving pieces. that is the outlook. rishaad: thanks, david. getting a check on the other stories, the world's biggest asset manager is staying bullish on japan, despite many foreigners choosing to exit the market. blackrock believes the decision to adopt negative interest rates will help the yen as we've been hearing, hold the yen lower. the topix, best performance in six years last week, but still down so far in 2016. japan's prime minister says he will push through the plan sales tax hike despite a shrinking economy and falling exports. prime minister shinzo abe said he would raise next year unless there was a big economic shock. abe also said he was not considering the general election to coincide with a schedule of

her house vote. china's refiners are selling more diesel at home rather than exporting as prices have made the mystic sale more attractive. shipments falling to five-month lows in january. exports in january fell 26%. imports jumped the most in 10 months. a busy week when it comes to earnings in hong kong. it is a mixed bag. let's have a look at what we can expect. bloomberg's first word reporter is with me now. it is a pretty mixed bag. let's start off with what we are looking at overall. >> we have 94 companies reporting this week, starting with hsbc today. a lot of news. low, we areons so hearing their more be -- there may be more potential upside than downside. is, willthe question

that mean that that is part of an industry group that will outperform? what sectors will? >> we're looking at tech, telecom, internet stocks, insurance may also outperform given the growth in new business, and also the broader range of investments. rishaad: who is going to do badly? just suggesting some of these luxury retailers. >> no surprise there. declining tourism as well as competition with online retailers. no one is really positive on banks right now. they face increasing pressure. -- what does this it signal for the rest of the year? >> we are already seeing 2016 estimates come down. estimates are down 2% already in the past month according to hsbc. oil prices and foreign currencies are priced into the market right now. if companies can come out and be

more optimistic, then investors can say they are gaining investments. rishaad: thank you very much indeed. steel isblue scope predicting that earnings will soar in the second half of the year. we will talk about the biggest growth drivers as well as the challenges ahead. we will speak to chief executive paul o'malley next. ♪

9:43 in hong kong and these are the stories making headlines. says he willlondon campaign for britain to leave the european union in june's referendum. he says the decision cost him a huge amount of heartache but he wants british people to take back control. johnson's choice puts him in

direct opposition to his conservative party leader and prime minister david cameron. the prospect of a so-called brexit is weighing on u.k. assets. newly hired outside lawyer says the u.s. court order to unlock a did terrorists terrorist'sdead iphone could compromise security. he said the order would open a pandora's box of privacy issues. apple is fighting the magistrate's tikriti, igniting a long simmering battle between the tech industry and government. edward snowden has told a gathering of supporters that he's willing to return to the u.s. if he's guaranteed a fair trial. he made the remarks via video link from russia. the former nsa contractor has lived in exile since leaking

details of secret government eavesdropping in 2013. he faces charges that could land him in prison for up to 30 years. by 2400 journalists in 150 euros around the world, this is bloomberg news. i'm shery ahn. rishaad: blue scope steel is expecting earnings to surge. the company saying it will increase from the previous year. that is thanks to stronger sales in china. shares in sydney up one .75% currently -- 1.75% currently. paul o'malley joins us now from sydney. great to see you. let's start off with -- a lot of this is down to cost cutting. themuch did you pair bone till? paul: we had about $100 million

of macroeconomic challenges in the half. doubling the profit included a cost reduction in the half to the bottom line. we told the market we will double that in the second half. rishaad: now that you've done that, how does that translate into future growth? it has to be topline growth and not bottom line. we look at our business in a number of parts. on the product side, investment in innovation and product development is paying off fantastically not only in australia but through our asian footprint. we've actually seen some of that in this half in australia, with our best domestic dispatches in five years. it can't all be about cost reductions. on the product side, it is all about innovation, branding, and product development. rishaad: let's talk about the product side.

where are the bright spots for steel? there is a lot of doom and gloom around the global economy. are you seeing any bright spots of the globe? paul: sure. with our roofing and walling products, australia, the east coast in particular, is very strong. our markets in malaysia, vietnam, indonesia, are good. thailand is flat. we also have some good sales in china. we are seeing it through this whole vertical slice of the hemisphere. demand in our space is reasonably good. rishaad: and demand coming from export out of china. we saw steel production in china peak in 2014. exports continued to go up. how is that hurting your business? are they dumping that steel? i think there's been a lot

of conversations about dumping and there's been a lot of cases that have proven dump rocks, not only out of china, but out of many other countries as well. i think there's a push by almost every consuming country in the world to protect their domestic industry from unfair competition or trade. that is the same as australia. there is going to continue to be significant exports out of china. my view over the next 12 months is that will start to reduce somewhat. it has a big effect on price. rishaad: you said earlier that most of these chinese steel makers aren't making money. how do you know that? basically, through public pronouncement. and through conversations with those steelmakers through our sales to them. between 30 tog

100 are in the on every ton of on every30 to 100 rmb ton of sales. we don't have any internal or inside information beyond the markets, but we watch all of the pronouncements very closely. member companies are losing cash on every ton of steel. it is a pretty challenging environment for that industry at the moment. rishaad: iron ore prices have been going down and down and years,er the last couple even though we've seen some movement to the upside. that must be improving your business. how much pricing power do you have? on iron ore, none. the big issue for us is the difference between hot or prices and iron ore prices.

those spreads are as bad as they've ever been. we are a price taker on the commodity side, which is why it is so important for us to invest in our premium branded steel products. in that space, we are doing well. on the commodity side, we've got no pricing power, so we just have to be low cost. we are doing that pretty well. rishaad: absolutely. thank you very much indeed for joining us. paul o'malley, chief executive of bluescope steel. next, counting down to inflation figures in japan. our next guest says negative rates are a signal the bank of japan is committed to its inflation goals. ♪

rishaad: glenn maguire is chief asia pacific economist today. he is in the hong kong studios with us. thank you very much indeed. let's have a look at china. what about inflation? are they in a disinflation trap? glenn: it is not surprising that in an environment where commodity prices are falling, and it is important to remember that china is the originator of that loss of demand for commodity prices and pushing commodity prices down, that we are seeing significant deflation in the producer price level. rishaad: [indiscernible] months or something. glenn: years. and disinflation at the consumer price level. that is consistent with a relative degree of margin. the patrol and oil sector is an interesting example. they were seeing oil prices

fall. one dynamic we've seen is retail falls by the same extent. it is consistent with in some sectors that are exposed to the, betty sector and the commodity price defines -- declines. that is going to keep that wedge between the producer and consumer price index, particularly in emerging markets, and those with state owned enterprises can perhaps build margin. rishaad: i want to move from china to what we expect from the boj. what are we looking at here? have they done all they can? glenn: certainly not. i think this is perhaps the new kuroda model. you have to introduce an element of surprise into policymaking. when you have a limited policy arsenal left to you, you need each announcement of change to be amplified by the equity market, by the yen, and by the

bond market. in a sense, you have to wrong foot the market. rishaad: but you've got to make sure they don't get to a sign of panic. glenn: and to a certain extent, the mantra of central banking has been stable inflation requires credible monetary policy. i think in japan, to get inflation towards the 2% target, you need incredible monetary policy. rishaad: that is your argument about negative interest rate. glenn: absolutely. you have to go further into the unorthodox. rishaad: but it takes two hands to clap, doesn't it? the other one, shinzo abe. where is that hand? the arrows, we could talk about. glenn: abenomics is moving slower than the boj. you can see that divergence. with the ministerial reshuffle,

perhaps we are looking at a more conservative economic lineup in japan. thei think the momentum of third and fourth arrow, they are still in the air. they are definitely waning at this stage. rishaad: not hitting their target in other words? glenn: will probably take them a little bit longer. rishaad: they are slow, are they? glenn: still airborne, but slow. rishaad: what else are we looking at, very quickly? asia, we southeast have trade and industrial production. asia is in a trade recession. exports are deeply negative across the board. industrial production, it may be stabilizing. that reflects the fact that china as well as rebalancing its economy is vertically integrating. it is calling on the rest of the world, not just in commodities,

but in components. rishaad: glenn, thank you so much. when maguire. our negative rates helping or hurting japan? that is next. ♪

♪ rishaad: it is monday the 22nd of february. are watching "trending business." ♪ rishaad: going to be live in tokyo and singapore this hour. here is what we are watching. japanesevanced with reaching the highest in the 2016,g week, up 7% in the just 10 days ago. oil on the uptick, russia on talks that the freeze will conclude by the end of the month. iraq and iran may be on the

higher cap because of war and sanctions. a water supply crisis to 80 million people in india's capital after interruptions of the supply, and shutting factories. let me know you what you think of our stories at twitter. though?sitive, how much some of there off holidays when it comes to regional benchmarks, is still better than we started. the nikkei 225 off the highs but still up 0.6%. shanghai up 1%. chairman, the former head has been removed. and now the former as bank chairman now seceding him. there are talks that he could take steps to boost of the chinese market, so markets

aren't dissipating more supportive policy coming out of china. hang seng up 1% every turn into an earnings season, and jakarta putting things off in the green, 0.5%. also seeing 9% gains in the zeal in stock, seeing -- new zealand stock, gains pretty flat. when it comes to china stocks, all sectors in the green. taxiing gains of 1%, financials up 1%. developers, lots of good moves today. the government said they would cut taxes on home transactions. we are seeing in terms of the fastest 62 of investments, real estate rising and for following on that. we are seeing materials, and the big movers in the china market. let's talk about iron ore. we have seen this come back as we had closer to $50 a chunk.

some are wondering if the rally will last, as we continue to see china's steel producers boosting output after the lunar new year holidays. that could boost, but it could be a little bearish expanding to see iron ore at $35 a ton on the medium-term. oil had a rebound, brent showing those as mentioned. u.s. crude a bit of a rebound after falling 3% to 4% on friday. e saw weaker yen. that is helping that nikkei 225 weshares, but the topix, did see a big recovery last week , but less than a third of the losses we have seen this year. the gauge is still down 16% for 2016 after touching that 15 onth low a few weeks ago. the calendar, like today. we are expecting japanese nikkei manufacturing data to come out any minute.

thailand and sri lanka both closed today for holiday. debt, itchina's ratio is suspected to keep on climbing. going policymakers as they work with the deeper slowdown without triggering the cause while the credit blowout. shery ahn is looking at this. shery: the ever present specter of china's overhang is going to worsen for at least another four years. seven out of 12 economists say the gdp debt ratio is increasing in 2019, and for safe route 2020 or later. for 2020 or later. there is a balancing act to insert average economic growth around 6.5%, not too fast to trigger a credit blowout. already last week, a report

showing that the bans extended a record $385 billion of new loans in january. the problem with these new loans as well as aggregate financing just surging since late last year is that, according to homing's, 40% of bank loans go to state owned enterprises, with interviewed 10% of gdp. 10% of gdp.tribute they are climbed the fastest since 2007. private companies seem to be handling the debt about better. they have got the ratio to 3% of assets from 58%. goldman sachs says it is impossible to identify the specific level of debt of which the chinese economy tips into financial crisis, but china's increase of debt is among the highest in recent history. and every major country with a

rapid rising debt has experienced either a financial crisis or a prolonged economic slowdown. the cube question is, which way will china go? rishaad: we are having a look at dbs shares. it is a development bank from singapore. the biggest lender showing the biggest margins jumping to five-year highs. let's go to his haslinda amin. she has quite a surprise. haslinda: the shares are gaining more than 2% this morning, outpacing the bench by fbi. 27%, $720 million. that is a gain of $120 million from property investment. the financer says he is confident the late in result cap a strong year, but financial

weeks created some uncertainty with the regions fundamentally's -- with the region fundamentally sound. one thing to look at, nonperforming loans. they are setting aside more money to push rising back loans , andn we saw fpl rise 20% at lcb it was 54%. dbs still new for now, still slightly low, under 1%. given that exposure counts from both at home and abroad, it is something to keep a close watch on. rishaad: thank you very much indeed. joining us from singapore, home of dbs. zeb eckert is having a look at change at the top in beijing. there is a new man in the

top job at china's national security regulator. the latest fallout from the $5 trillion stock route. the man who oversaw the regulatory response to that, the former take of china head, was removed from his post according to the news agency. to -- it reverberated throughout financial globe markets. crsc ischairman of the the former agricultural bank of china leader. yahoo! willhat approach private and public equity investors as it seeks bidders for it for business. -- its poor business. interested at&t are as well as banks like kkr and gdp.

yahoo! revealed last friday it is exploring strategic options as it works to transform its challenge to business on rising pressures from investors. shares are down 10%, and with market values at $28 billion on friday. industry --still steel industry is facing declines, bluescope is cost cost-cutting. plunging commodity prices and uncertain global outlook have hurt profits of steelmakers and strategy health of this. also, strong presales other residential market in australia. and boom in construction. paul o'malley said that china's steel export reduced over the next year, and prices are more likely to fall than rise. >> there is going to continue to

be a significant export out of china. it will start to reduce somewhat , but it has a big effect on price throughout the world for sure. rishaad: subbing on the website, north korea getting money in and out of the country. that is compelling. it is a bloomberg.com/asia. the philippines prepares for elections in june. one of the biggest facing the thelenge -- leadership is administration. the japanese economy, speaking recklessly -- exclusively to the general. ♪

rishaad: the ocd says japan's negative interest rate will not be enough to jump start the economy.

that could be for this year and next. let's go to stephen engle. he is with the deputy general of the oecd. arehen: our guest is rent oh -- rentaro tamaki. i do so much for your time on bloomberg television at the apec summit in stingray law. -- saint greenlaw. a quarter of the world's economy is in negative rates. will this hurt or help the japanese store and economy? >> first of all, thank you for this opportunity. you raise the question on interest rates. europe has undertaken this quite of policy technique for a long time. in the context of japan, we have not seen any definite outcome of

this with an introduction of the new policy. yes, i think so. stephen: how far do they go. how far does mr. kuroda ago to meet -- an end to a means? >> i know him, and he is in policy discussions, very consistent. stephen: you think this will spur inflation? what is the ultimate reaction to this? they obviously want banks to lend into the economy, but households are reluctant to spend. >> it is the aim of governor kuroda in introducing negative interest rates. it is the change he poses, the expectation among corporations and people. and households still missing the

confidence of the future from their future. they are living under the circumstance of declining whatever falls, depreciating currency, sluggish economic growth, the oecd published last ink japan's economic growth 2016 will be 0.8%. we need to give them the household confidence to establish some confidence among private sector. first, we have to achieve this consolidation on a solid way. then i say we have to raise the potential growth in the japanese economy. now, maybe the estimation is 0.5%.n 0% and we have to make efforts to mobilize policy majors to aim

potential closer to japan. stephen: why do you think the japanese household does not have confidence? if these measures should work, houses, mortgages should be cheaper, but people are still not willing to work with their savings. confident oft be their life in the future. their next generation, the next generation, they have no image, of their sons, daughters, granddaughters, grandsons. this is lack of confidence. stephen: how would you assess the efficacy so far of the economics? it has taken a bit of a punch to the face. >> it is very innovative, very from negative in

side to positive side, the cbi moves up to 1%, 1.5%. the monetary policy, it is to achieve the first target of economics to overcome deflation. more importantly, the purpose of economics is to age the growth of japan's economy. it is a business of government. stephen: you expect the yen to eturn to its weakening trend? will that bruce exporters to get out of the slump? theirst of all, on accentuation, it is the markets. then depreciation does not facilitate exports. only in thece not last few years but september

also. everywhere. thesing is a function of economic situation in the markets, in the imported markets. not a function of accentuate. stephen: you are giving a speech at aipac in financial investment. there should be long-term, but given the market, they have been more short-term. ,> investors, pension funds they are managing about $96 trillion, a huge amount of money . they have to make an investment in long-term investment. very important in japanese context. it is a threat of climate change. cop 21ws is the

agreements. but this contribute to low economy. we have to make a huge transformation with economic and social system. investment as well. long-term investment as well. i encourage japanese investment bankers to make their long-term investment greener and greener. stephen: why is that a priority when there are more short-term concerns with deflation, with negative range, confidence in the stagnation that we have seen more than two decades in japan? ,> they are longtime investors and they have a huge exposure to conventional markets, vehicles. they seek lower and better investment, long-term investments. this is a quite fitting to the exposure, semi-dialectic

exposure. if they invest in ground, not green, this is quite risky investment. ,tephen: before we let you go do you think this move back into negative rates is going to work? >> i hope so. i am giving it time to see. stephen: the consumer will start spending, or they will start saving again, keeping it in the safe? >> the government should undertake more broader and more brave structure of policy. in many markets in japan, both productive and labor markets. stephen: you are going to have an election in the upper house this summer. we can see this before 2018. now is the time to do it? >> always now is the time to embarq on the brave performance. i-san, thank you

so much. much more coming up. we are not done yet. lots more from the aipac summit, japan summit, in tokyo. rishaad: great hearing from him. now to stories making headlines around the world, suicide bombings in syria have killed 140 people as u.s. and russia have agreed to terms of a cease-fire. isis claimed responsibility for the attacks in the mainly shiite areas. details.e no more violence is becoming apparent in turkey and saudi arabia as they become more engaged in the war. half of the water supply to india's capital has been disrupted after deadly unrest in a neighboring state. off the watershut

canal to more than 18 million people. this affects jobs and colleges. they have eased the blockade of growth into the city, but schools remain closed on monday to conserve water. apple's lawyer says a u.s. court order to unlock the terrorists iphone good in peril the legacy of millions of people around the world. the general says this would open a pandora's box of privacy issues. there is now a long simmering battle between the tech industry and the government and the fight of terrorism. inered by 2400 journalists over 150 euros around the world. this is bloomberg business. plans to move headquarters. quarterke about

earnings today. this is "trending business." ♪

rishaad: we are back. hsbc announcing results. 2016 shaping up to be a busy year for them. we are outside their headquarters in hong kong, and what we looking at today? dismal set ofr a results last year, we might be seeing more of the same this year. analysts told by bloomberg said that for four years, the average tax would come in at $21.7 billion. that would be up by 16% from last year. eternal equities, seen as profitability, is expected to -- 8.4%.

they are looking for a number that would set off equity at 10%, or around 10%. there are still some work to do if it comes in at 8.4%. the key thing would be looking ahead to 2016 and the outcome of that, market vulnerability and slow down, which is weighing on investors minds as well. revenue slow coming in, and also outlook processing. about $5 billion worth of this by the end of 2017, which they denounced last year. also whether it will exposed to oil and commodities, falling vulnerability in those -- volatility in those markets as well. in terms of texture, it is seeing profits by business, retail banking and wealth billion,t by $12.9

commercial banking $8.9 million, and global fund banking at $424 million. we will be looking to see if it is the estimated numbers. rishaad: douglas flint, the chairman and ceo, he said they have a lot on their plate. pretty busy. yes, already seeing several announcements from them. last week they announced they had decided to stay in the u.k. to keep headquarters in the u.k. despite the concerns about possible breaks. they also wanted to restock the turkish business instead of looking to sell it, which they said for some time. and the banker had a bit of back and forth about his pay for employees. quite a bit of a year for the bank, and we will see what else they have to say in the plan for the coming year. rishaad: thank you. , 130 by yearnue

end. that is what goldman sachs says about the yen. we would like about the prospects right after this. ♪

the conference call. the ultimate arena for business. hour after hour of diving deep, touching base, and putting ducks in rows. the only problem with conference calls: eventually they have to end. unless you have the comcast business voice mobile app. it lets you switch seamlessly from your desk phone to your mobile with no interruptions. i've never felt so alive. make your business phone mobile with voice mobility. comcast business. built for business.

♪ rishaad: a look at the top stories. the pound. after the london mayor says he will campaign for britain's exit from the european union in a june referendum. he says he came to this decision after a great deal of heartache. sent to dbs out with a high.

dbs is the second of singapore's major lenders to report better than expected earnings. they are covering their deaths during an economic -- debts during an economic downturn. china is struggling to cope with the worst quarter in a century. worst quarter in a q uarter of a century. it is vicious as usual a slaughtered -- it business as usual elsewhere. nikkei 225 is up 6/10 of 1%. i want to mention one of the big rumors. kansai elect hours --

electric powers. one of the biggest of the biggest aquinas in the industry is down 4.6%. richie maki, he is a japanese banker turned opposition leader, who was saying the governor just got it wrong. the doj is tapped right now. bank doesn't have courage to expand negative rates. that will expedite collapse. today, stronger gains in equities with a weaker yen. shanghai stocks are about 1%. -- 1% up.

china composites -- jakarta composite down 1/10 of a percent. to lunch break, we talk about the oil prices could some declines -- oil prices p. the u.s. is rebounding did we ar. energy suppliers are falling down in tokyo. japan petroleum is down 1.35%. rishaad: china may be doing a better job when it comes to cutting debt. here's corporate finance guru l ian -- >> we have heard about corporate

butuage going up in china, haven't dug deeper into the data. looked at 3000 firms from china. are deleveraging compared to the soe. for a privateatio sector companies, defined as we asset ratio, actually declined to 53%. up totio for sle's went 52% now. rishaad: why are these companies leveraging up? has artie said he is going to reduce corporate get dy said he isalrea going to reduce corporate debt out there.

lianting: they didn't really want some the debt from that stimulus package, but now, they had to take it. they're burdened with debt they cannot play -- repaid. rishaad: what can beijing do to get out of the projected that mass? -- debt mass? lianting: the government really means to get rid of the implicit guarantee. not need to cut the excess capacity so that the economy can be more efficient. progressing slowly. the seo rating may be cut in the

next few months. rishaad: thank you for the latest on the corporate that issue in china. looking at markets. shorting the japanese yen, buying japanese stocks. at this having a look advice. this is deja vu all over again? [laughter] david: i think it is. the short that they are saying, like goldman for example, you know, the doj is still on a fairly aggressive policy. what i have the now sxc,under bloomberg f actives in this puts everything together for you. -- that's puts everything together for you. have a look at this. we are looking at 123.

goldman is at 130. higher end of the spectrum. let me get out of the screen, here. let me show you where we are as far as goldman is concerned could -- concerned. i should also note that some of these technical analyses are telling us that we could actually push towards about one and 10 in these levels again. as we make our way to the end of the year, we are headed to 1-30. dollar-yen and we expect the same move in the chart for the euro-yen. let us put everything together. that is the forecast for the japanese currency. a lot of this has to do with the record amounts of of flows in japan.

have a look at this. seeally, you do not outflows is much. let's look at asia. go. is a simple fw i i but have a close look. look at the number like there -- right there. $23 billion outflows in equities alone. that shows a lot of dollar pressure on the japanese currency. when you look at the topix index, the valuations have been to fairly low levels, i should note. have a look at the index. haveis what strategists penciled in this year. there are still bullish. we are at just 1300 at the moment. the little magic there. call ofthe average

where we will be for the topics at the end of the year. 20%, 22% from where we are at the moment. a lot of fun managers. -- fund managers. that seems to be intact as far as goldman. rish.urs, rishaad: world's biggest asset managers are staying bullish on japan as stocks tumble. dropping interest rates will indeed hold the and lower. -- hold the yen lower. japan's prime raise theays he will

levy to 10% next year, borrowing a big economic shock. a crisis the size of lehman's, or indeed, major earthquake. -- china's food and drug administration equipment stopped using the system, as it considers the other ways to identify -- medicine. it is a big influence on the alibaba health chairs. the stock plunged 20% before rebounding that day. is wanted to cook assist in the fbi's overcoming of security measures of the can recover information from the handset of a dead terrorist.

he says that sets a dangerous president for consumer-- precedent for consumers. >> most important thing for the consumer is we should protect their privacy and 30. -- and security. the is why we support president of apple, tim cook, idea. rishaad: samsung has unveiled a smartphone. 7 has unveiled new features. what do we know about this? likee s7 and s7 edge look the s6 models, but samsung took a bit of a gamble, removing some features: a memory card slot and a wraparound battery, which gave

the phone more power. they are bringing them back for the s7. this is their move to win back customers. the s7 has a 5.1 inch screen. screen. has a 5.5 inch 360 degree photos and is part of the virtual reality market that google and apple are tapping into. they are confident about this product. >> the market for the smartphone is slowing down a little bit and there is much more than just a phone now that you are holding in your hand. when you use one of these new isices, yethe s7, this

more than a phone. it's your camera, your mp3 player, your tv, your recorder, everything and more and more and more is coming. rishaad: investors have to give him that. is this going to be the crown jewels? >> analysts are saying they may need more innovative products. it should have an infection in the samsung share price, which has been under pressure. they nicknamed the product themselves. "the hero." it is coming back from "the zero." they're hoping they go from zero to hero. they hope to turn their fortunes around as they try to win back in market share from a number of chinese vendors and apple. you.ad: i givthank

president aquino has turned the philippines into one of the most promising southeast asian economies. how things change when he hands over power later this year? we put that to the country's finance secretary. when trendingve business continues.

>> these of the stories making headlines around the world. america merit of london says he will campaign for britain to leave the european union engines referendum. he says the decision is causing them a huge amount of heartache, but he wants the british people to save money and take back control. direct--him in

direct opposition to david cameron. this is weighing on u.k. assets, with the pound falling the most in three months. most of fiji lost electricity on sunday, and residents were told to stay inside for a second straight night. the strongest storm ever recorded in the southern end of share -- southern hemisphere paid six people are dead -- hemisphere. six people are dead. an emergency state has been sunday morning. from -- and were smoking -- edward snowden offered to return to the u.s. if offered a fair trial.

his charges could put him in prison for up to 30 years. inered by 3400 journalists 150 euros around the world, this bloomberg trending business. rishaad: according to finance he has been leading the charge for the philippines to -- steve?o high, you're talking purisima, the finance secretary of the philippines. we are at the japan summit. this is an election year. this is a crackle year in the philippines. s a critical year in the

philippines. sec. purisima: it is important to point out that the philippines is the only u.s. style democracy in asia. the important thing is the credibility of the election. the philippines has had many successful elections. i'm confident this will be another successful election. steve: what should be the financial priority of the next president. sec. purisima: we need to continue president aquino's programs. continue to open up the economy, make sure we have opportunities to improve connections to global supply chains. steve: do you see room to raise revenue without raising taxes? sec. purisima: yes, we need to continue to use and diplomat

technology -- and implement technology. expect, i mean globally, there has been to minutes amounts of volatility. do you see, in the philippines, more volatility? sec. purisima: i think volatility will be because of what is happening outside the philippines. it has never been better. has been asituation source of stability for the past 10 years. yearis the 13th straight of surplus. this the highest we've had in 40 years. the next president has a very good momentum that will help him

move to the next level of growth. steve: are you willing to go into the next and illustrations? -- next administration? you have to make sure that when you're in this position, you don't drop the baton. i work closely with whoever's place to make sure the transition as smooth. steve: would you welcome a role in the government? sec. purisima: every filipino has a role in the government. [laughter] steve: so you were not retiring? sec. purisima: i have two children. i work hard. steve: are you done for now, or do you see room for more bonds? sec. purisima: we're always on the lookout for liability management opportunities. in terms of new money, that is the program for the year. we have been limiting foreign currency, it is still 50% of our total

borrowing. third ofn to about one for exchange, compared to before, when it was close to 50%. livability. the we were looking at this during the first half of the missed ration -- of the administration. nobody knows which way we were go. the yen appreciated, but now, i believe it is too weak. maybe in the next initiation. --next administration. panda, we aree still trying to tap that market. steve: and upopanda bond? as opposed to the samurai? sec. purisima: and and se-- panda and samurai.

steve: have you make sure investors do not get lost in the noise of the election? -- how do you make sure investors do not get lost in the noise of the election? sec. purisima: we make sure that investors have direct access. they should understand the history of the philippines. changeshad successful in the admin station. the election is a noisy one, similar to the u.s. steve: have a safe flight tonight. the financial secretary of the philippines. we're not done yet. you will be in the next hour japan's ceo.o, we're heading to mumbai and getting the details of the flooding, after the break.

sec. purisima: or than half of the water-- half themore than water supply in india has been disrupted after flooding. the day to you, do tell us what is going on. -- guarantees a wide range of

benefits, including -- fornew welfare programs indigenous tribes, fighting for whomiddle class are leaders comprise of 25% of -- to reach some conclusion last evening, the government said it -- more been told ground why is this important? -- geography is really shares the national capital along with two other states. it is taking place in a large industry corridor. it has some the largest auto makers-- our new parts -- auto part makers.

they were likely damaged from the protests. they would, in the future, have to increase the number of flights to deal with the inside. day-to-day life has also been hit. they were talking about an unprecedented number of people who have not received the water supply in the past couple of days. 20 people have lost their lives. for thisthat is it monday edition of trending business. angie is going to be around today recapping the big stories. coming up, alex otto.

the conference call. the ultimate arena for business. hour after hour of diving deep, touching base, and putting ducks in rows. the only problem with conference calls: eventually they have to end. unless you have the comcast business voice mobile app. it lets you switch seamlessly from your desk phone to your mobile with no interruptions. i've never felt so alive. make your business phone mobile with voice mobility. comcast business. built for business.

>> this is a live look at the first day of trading in hong kong. this is asia edge. ♪ >> asia stocks are starting the week higher. oil is advancing with nigeria joining in an output increase. reporting results after a to motorists the months.

-- a tumultuous few months. a five bedroom house in hong kong sells for more than $100 million. it is deemed a "disappointment." we will look into that in this monday edition of "asia edge." >> things are looking pretty good. we are extending the gains that we saw last week. we are seeing the shanghai stocks really leave those gains up 1.65%. the hang seng is up 7/10 of 1%. i do want to mention that south korea exports have another disappointing month. customs office posted figures for the first 20 days, ng